3.  The applicant is an architecture company, a legal entity, based in Istanbul.
4.  On 10 October 1983 the applicant concluded an agreement (“the agreement”) with the Federal Republic of Germany (“the German State”) for the restoration of the building of the German Consulate in Istanbul. In Article 9.5.7 of the agreement, the Berlin courts were determined as having authority to settle any disputes arising out of the agreement. In Article 9.5.8 of the agreement, German law was defined as the principal applicable law. Besides, the law of the place where the restoration work was to be carried out was specified as the auxiliary applicable law. Moreover, the parties agreed that some intermediate payments would be made to the applicant on the basis of estimations in accordance with the progress of the work, and the ultimate monetary claims would be determined after the transmission of a final statement of costs (kesin maliyet hesabı).
5.  The applicant was paid some intermediate fees and expenses incurred while performing its contractual undertakings.
6.  On 21 February 1986 the German State terminated the agreement unilaterally.
7.  In 1987 the applicant brought an action against the German State challenging its unilateral termination of the agreement and requesting the recovery of its monetary entitlements.
8.  The Berlin Court of Appeal (Kammergericht Berlin) initially resolved the issue of the law applicable to the dispute between the parties and decided that German law was applicable to the case. In its decision of 20 November 1990 it established that unilateral termination of the agreement was based on a valid cause. On the other hand, the court maintained that the applicant’s claim for the outstanding sum would become due only after the issue of the final statement of costs, as provided in the agreement. For this reason, the Berlin Court of Appeal refused the major part of the applicant’s claim on the ground that the precondition for requesting the outstanding amount had not yet been fulfilled. It awarded the applicant some partial cost and expenses. Neither of the parties contested this judgment and thus it became final.
9.  Following the judgment of the Berlin Court of Appeal, the applicant requested the German State to send the final statement of costs.
10.  In a letter of 16 August 1996, the German authorities stated that the applicant could only be entitled to sums for the services provided until the termination of the agreement in 1986.
11.  On 7 November 1996 the German authorities drew up the final statement of costs in the reconstruction project, which consisted of the items of expenses and their final costs listed from the planning stage until the termination of the contract. This statement was then sent to the applicant.
12.  On 10 January 1997 on the basis of the data provided in the final statement of costs, the applicant calculated the difference between the payments made and its entitlement of the final fee of work. Subsequently, the applicant issued an invoice to the German State, indicating 1,700,000 German mark (DEM) as the outstanding amount.
13.  Following the German State’s refusal to pay the amount claimed, on 12 July 1997 the applicant lodged an action in the Istanbul Beyoğlu Commercial Court, seeking payment of the sum in question. In the light of the provisions of the agreement and the judgment of the Berlin Court of Appeal, the applicant claimed that the final costs had become due.
14.  On 20 October 1998 the Istanbul Beyoğlu Commercial Court observed at the outset that the judgment of the Berlin Court of Appeal complied with the conditions regarding the recognition (tanıma) of foreign judgments set out in sub-paragraphs (b) and (c) of section 38 of the Turkish Private International Law and Procedures Act (Law no. 2675 – “the TPILPA”). On the other hand, establishing that the subject matter of the two cases were different from each other, i.e. the proceedings before the Berlin Court of Appeal had been relating to the claim of expenses arose during the delivery of the project and the proceedings filed with the Beyoğlu Commercial Court was related to the payment of unpaid fee of work, the first-instance court asserted that the Berlin Court of Appeal’s judgment could not be considered as a definitive and enforceable judgment (kesin hüküm) for the proceedings which were before it. Eventually, the Istanbul Beyoğlu Commercial Court examined the case solely in the light of the Turkish law and held that the amounts payable to the applicant had become time-barred, as in accordance with Articles 126 and 128 of the Turkish Code of Obligations the statutory time-limit of five years had started to run from the date of termination of the contract. In this regard, the Beyoğlu Commercial Court refused the applicant’s claim that its unpaid fee of work had only become enforceable after the transmission of the final statement of costs in the project, a fact which had been established by the Berlin Court of Appeal.
15.  On 1 March 1999 the Court of Cassation upheld the first-instance court’s judgment.
16.  On 24 June 1999 the Court of Cassation agreed to the rectification of the judgment and remitted the proceedings to the first-instance court for further analysis as to whether any developments which would interrupt running of the time-limit, had occurred in the contractual relation between the parties.
17.  In the further stages of the proceedings, the domestic courts no longer examined the issue of recognition of the judgment delivered by the Berlin court, on the ground that the parts of the judgment in question were not subject to the rectification and thus had already become final.
18.  In the remainder of the proceedings, the first-instance court and the Court of Cassation continued to examine the case on the basis of an interpretation of the different provisions of the Turkish Code of Obligations as regards the application of the statutory time-limit, and sought to establish which provisions were applicable to the case. Throughout three rounds of examination, the first-instance and appeal courts disagreed on the question whether the defendant party had acknowledged paying any amount to the applicant in its statements of 16 August and 7 November 1996 and whether that could be considered as implicit withdrawal of the right to plead prescription (zamanaşımı def’inden feragat) on the part of the German State.
19.  On 15 May and 23 July 2001 two expert reports submitted to the Beyoğlu Commercial Court estimating that the applicant be entitled to 1,408,147 DM.
20.  On 16 October 2001 the Beyoğlu Commercial Court decided that the final statement of costs issued in 1996 by the German authorities had been an admission of debt forwarded to the applicant company which had an effect of an implicit withdrawal on part of the German authorities of the right to plead prescription of ten years, set out as a general time-limit in Article 125 of the Turkish Code of Obligations. In this connection, the court dismissed the German authorities’ pleading for prescription and held that the applicant was entitled to the award of 1,408,147 DM.
21.  The judgment was, once more, quashed by the Court of Cassation.
22.  The applicant argued before the said courts on numerous occasions that the Berlin Court of Appeal’s judgment, having determined the due date of the applicant’s claim, should have been considered as conclusive evidence (kesin delil) pursuant to Section 42 of the TPILPA, in resolving the issue of the starting point for the time-limit. In this connection, the applicant maintained that it had a lawful and rightful claim to full payment of the outstanding costs, as the Berlin courts had not dismissed its claim on its merits, but had simply deferred its enforceability to a future date. In addition, the applicant alleged that the translation of the Berlin Court of Appeal’s judgment lodged in the case file contained fundamental errors, which had misled the national courts.
23.  On 30 September 2003 the Istanbul Beyoğlu Commercial Court held that the statutory time-limit of five years under the Turkish Law of Obligations had started to run from the date of termination of the agreement in 1986, and since then the defendant party had not acknowledged any debt to be paid to the applicant or any other reason which would interrupt the running of the time-limit. In its judgment, the court refused the applicant’s request to have the translation of the Berlin Court of Appeal’s judgment corrected, holding that it had no bearing on the outcome of the proceedings as the issue in question had already been settled. Lastly, while dismissing its case, the Istanbul Beyoğlu Commercial Court ordered the applicant to pay 5,736,500,000 Turkish liras[1] (TL) in legal expenses to the defendant party.
24.  On 30 March 2005 the Court of Cassation gave its final decision and held that the case was to be dismissed as having been lodged outside the time-limit prescribed by the Turkish Code of Obligations.